Basic Education on Crypto
Learn about 51% attacks, their risks, and implications for blockchain security.
Occurs when a single entity gains control of more than half of a blockchain's computational power, allowing them to alter the blockchain.
A measure of computational power in a blockchain network, crucial for determining the network's security against attacks.
A scam where the same cryptocurrency is spent more than once, made possible by reversing transactions in a 51% attack.
Smaller networks with lower hash rates are more susceptible to 51% attacks due to easier control over the network.
A 51% attack, also known as a majority attack, occurs when a single entity gains control of more than half of a blockchain network's computational power. This control allows the entity to alter the blockchain, potentially reversing transactions and enabling double-spending of cryptocurrencies. Double-spending means using the same digital currency more than once, which undermines the trust and security that the blockchain is supposed to provide. Essentially, a 51% attack can compromise the integrity of the entire network.
The hash rate is a measure of the computational power used in a blockchain network, especially those using proof-of-work systems like Bitcoin. It determines how quickly new blocks can be added to the blockchain and how secure the network is against attacks. A higher hash rate means more computational power is needed to control the network, making it harder for any single group to achieve a 51% attack. On smaller networks with lower hash rates, achieving this control is more feasible, posing a greater risk.
Double-spending is a type of scam where the same digital currency is spent more than once. In the context of a 51% attack, the attacker can reverse transactions on the blockchain, allowing them to regain control of previously spent currency and use it again. This action undermines the reliability of the cryptocurrency, as it allows attackers to effectively create value from nothing, which can devalue the currency and harm trust in the network.
While large networks like Bitcoin are relatively safe from 51% attacks due to their size and computational power, smaller networks can be vulnerable. For instance, Ethereum Classic and Bitcoin Gold have experienced such attacks in the past. In these attacks, the perpetrators were able to reorganize the blockchain, reversing transactions and causing significant financial damage and loss of trust in the affected cryptocurrencies.
Despite the power gained in a 51% attack, attackers cannot perform certain actions. They cannot reverse transactions from other users, create new coins, or steal coins that belong to others. The attack is primarily limited to altering their own transactions. Furthermore, while they can prevent some transactions from being verified, they cannot stop new transactions from being initiated or broadcasted to the network.
The likelihood of a 51% attack decreases as a blockchain network grows. For larger networks, the computational power required to control the majority is immense, making such attacks expensive and impractical. To mitigate the risk, some networks have increased the number of confirmations needed for transactions, making it harder for an attack to succeed. However, smaller networks remain vulnerable and must take additional security measures to protect themselves.
This lesson was rewritten by Prison Professors for educational use, inspired by Binance Academy. The original article remains the property of its authors.
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